Should I remortgage?

westy27 · 16 March 2017 at 3:35PM

Hi, have been considering remortgaging early and paying the early repayment charge (£7000).

I currently am 2 years through a 5 year fix at 4.99%.

Mortgage outstanding is £145,000 plus £7000 early repayment charge to be added to remortgage. Property valued around £174,000.

Have put all this into comparison sites and looks like I could get a 2 year fix at around £640 per month compared to the £840 I pay now.

Have spoken to our original mortgage advisor and he says no, but basically baffled me with jargon :-)

So my question is - am I missing something obvious? A saving of £200 per month is a lot of money to me!

Thanks in advance for any replies :-)

sysadmin · 16 March 2017 at 4:11PM

Over the 3 years you would only be potentially £200 better of if you are excatly only 2 years into your 5 year fix.

Essentially it will cost you £7000 to come out of your fixed period.
If you do come out, over 36 months (3 years remaining) you will save £7200 but you've already paid £7000 to come out of the fix, so are really only saving £200

Again, thats based on you having 36 months remaining in your fixed period.

getmore4less · 16 March 2017 at 4:12PM

in 3 years
£145,000 @ 4.99% £840pm you owe £135,815

you need a deal that can get to that adding £7k

£152,000 @ 3.25% £840pm £135,826

if you pay £640

£152,000 @ 1.59% £640 £135,839

Boredatwrork · 16 March 2017 at 4:12PM

How many more months are left on your 5 year fix?

You could be 1 month or 11 months into the 2 years, which makes a big difference to the calculation and the ERC charge (this can devalue as each year goes by), your mortgage agreement should explain the % differences.

westy27 · 16 March 2017 at 4:21PM

Thanks for quick replies!

I have just payed my 24th payment so have 36 months left of the 5 year fix.

By my rough calculations the remortgage fixed for 2 years would be 2.19%.

If I can get the same again for the 3rd year it would leave me with £137,000 mortgage remaining, so only 2 grand more than my 5 year fix, saving me 5 grand over the next 3 years &#55357;&#56397;

Boredatwrork · 16 March 2017 at 5:12PM

Sorry, should of added this earlier, any idea of how close you are to the next LTV, and what LTV you are currently on (you can call your mortgage provider who can give you this LTV information). if you are close enough it might be worth over paying or waiting a few months to open up better deals.

westy27 · 16 March 2017 at 5:20PM

When we took the mortgage out it was 95%, LTV now is 88%.
Just found a deal with Loughborough bs for 2.19 fixed for 2 years with only £200 setup fees, very tempted :-)

Should I remortgage?

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